Enterprise architecture – transformational industries

I was participating yesterday in an interesting panel discussion organized by KAOS (Enterprise architecture knowledge community). We were talking about transformational industries and impact of enterprise architecture in that scene. Here I collected few of my own takeaways and thoughts risen by the discussion (Not fully covering, just a flow of thoughts around the topic).

How to earn for digital products?

We often hear that people are not willing to pay for content available in internet. One question to ask for is, if the content is actually made for online consumption? If an analog product is just moved into digital world, user experience will most probably be rather poor. If pricing plan is copied from analog world, it might not fit into digital consumption behavior. There are already many good examples of earning models complemented with nice user experience which seem to be working. Payment barriers/walls are not the solution, if content or how it has been presented is not relevant anymore. So my conclusion is that we should not make user guilty for this problem, companies should rather look into their own approach and rise it to meet expectations of the audience.

What is the role of the ecosystems?

The role of ecosystems is interesting. Also earning models were discussed under this headline. Naturally it is painful, if you should give away 30% of your profits without any compensation. You could look situation from an other perspective too. If ecosystem provides you with reach to a market much bigger than you could reach with your own effort, why shouldn’t it earn some money from that too? If options are that you get 100% of 50Meur revenue or 70% of 500Meur, which one would you choose? Naturally startup companies like Supercell or Rovio have been open minded enough to boldly take this approach (and with quite great success I might add). Other well established big brands might have more difficulties to take this path.

How to reach new markets?

Utilizing these new ecosystems seem to be one way for certain industries to expand their market reach. Games are obvious example here. Also new competitors for broadcast TV like Netflix. These content providers co-operate with TV and set-top box makers and thus make themselves available where ever those devices are available. Neat approach as you don’t have to worry about how to train users for this new way of consuming your services. Technology providers have taken that effort already. Movie rental business is also sliding into hands of global players. Why would you go to local video store, if you can rent a movie with couple of clicks? These movies are also cheaper, selection is newer and you don’t have to worry about returning them.

Industry borderlines, do they still exist?

Many companies seem to be sliding from their core areas to corners of other industries while trying to figure out new earnings models. This will have big impact into media industry in near future. Many companies with big assets and dropping revenue flows from products that are getting obsolete among their target audience, will move their focal points of business thus shaking the stability of surrounding industries. Important thing is to figure out what the core of business is. I believe it is easy to loose focus while making big moves. The leap over border to new industry is not necessarily easy trick with out proper planning and establishment of new capabilities. On the other hand (sorry, I remember, this approach was reserved to professors only) it seem to be difficult to abandon well known corner stones of business while they are still relatively profitable, even though you might see that they are falling with increasing speed. This just makes opportunities for flexible new comers. Empty pockets in the market will be filled and industry borders are not hindering down that progress.

Enterprise architecture – how does it help here?

I strongly believe that enterprise architecture is making it possible for companies to adopt themselves with the change. With proper planning you can create needed flexibility to renew company when needed. Same capabilities can be utilized whether you plan to scale up or down specific business areas. Also increasing speed of implementation while bringing new innovations to the market is quite good asset for any company. Architecture helps business decision makers to structure better the decision making targets. If strategy and architecture are defined in sync, it can even help to foresee new paths where business might be possible to transit.